Your Most Important Investment
Living in a world where you have the chance to see many different financial records of home buyers, you sometimes wonder why some people just don’t get it. Get what? The best use of money. Good and bad habits show through on all financial portfolios of the rich or poor.
I have seen people with six figure incomes and very little debt yet with very little in savings. I have seen people with incomes below the median area income and yet have more cars and toys then the value of the average home in the area and still renting a small apartment. No matter the portfolio, most people spend too much money eating out. Actually the average home buyers I worked with spend more money eating out than on groceries each month.
Other than your health and the health of your family, your home should be your most important investment. I want you to think outside the box and first take a look at your annual social security statement. This statement tells you what age you will be able to start collecting social security income. Your overall plan should be based on that age or the age at which you will have the ability to chose when you want to retire whichever comes first.
Your goal should be to have your home at an equity position greater than 50% of your home’s value by your retirement age. The sooner you purchase your primary home the easier it will be to achieve this. This has to do with the time value or money, amortization, and capital appreciation.
At this point in your life you will then have the opportunity to do one of two things. Either do a reverse mortgage on your home or refinance your home into a lower monthly payment basing it on your retirement income. It’s important to never refinance your primary residence in order to consolidate debts. This could lead to financial disaster. Your priority is to always protect your home before protecting any other asset. Remember if we have another financial crash its easier to try and pay a lower mortgage than it is to live inside a fancy sports car.
Renting a home should only be a temporary thing for any family. Rents increase every year and in most cases, leads to a diminish living conditions and depression. Cracking down on foolish spending like eating out 7 days a week or buying a used car versus a new one can help you put yourself in a better position for attaining home ownership.
If you would like me to help you put together a good plan to maximize your potential for home ownership call me. Ask questions, get all your facts and we will see you at a happy closing table.
Are you and employee or self employed? This is not an uncommon thing, where people do not know or understand how they are classified or paid. There are some significant differences from a W2 employee or a 1099 Self employed individual.
I am not an attorney or a CPA, I do not work for the IRS or department of labor nor do I want to. However, I do want to talk about this from a loan origination point of view and what the basic facts are of what we ask of you when you complete your loan application and for us to get your loan approval.
Let’s start with are some common statements I hear from borrowers regarding the confusion between being an employee or self employed: Continue reading
Is it the lender or me that is causing the issues? Well there are many different types of lenders, banks and mortgage brokerages. Each one has a different type of niche or type of borrower/ loan they prefer to work with and, yet some are just plan cookie cutter (generic). Probably it is a little of both!
What is hard for many people to understand is that its just as much about the lender as it is about the buyer. A buyer with an 800 plus credit score, who is a W2 employee and applying for a loan amount over $250,000 can pretty much pick who ever they would like to work with and really shop out the best rate.
A self-employed individual with two or more companies and multiple properties with a loan amount under $250,000 and a credit score in the 600’s is not likely going to have an easy time shopping rates and would rather spend more time searching for someone to get their loan done on time. This type of buyer is Continue reading
Protecting Your Information
Most of us live very blindly and the trust we put in others, is beyond measure. My grandfather had a saying, “If you cannot see who you are dealing with, who are you going to see if you have a problem with the item you’re purchasing or the service you are be receiving.”
I hear it all the time from the millennial’s Continue reading
We Already Signed these
It’s a very common statement made by people going through the mortgage loan process. When making or filling out your loan application you will most likely be signing some releases and / or initial disclosures. Some of these you may sign again within the next couple of days, as a full loan disclosure package will be sent to you.
Many circumstances may change throughout the loan process regardless of Continue reading
I have cash, it’s my money, I earned it what’s your problem? Why can’t I use it for my down payment or closing cost?
This is actually a very common issue, question and concern for both the consumer and loan originator. I estimate this happens in one out of every seven transactions which experiences a cash issue.
Loan originator: Asking an applicant for a mortgage loan; What are you using for funds for your down payment and closing cost?
Applicant: I have cash. Continue reading
Low Down Payments and Grant Programs
There are many programs out there for the first-time home buyer. Each state may have their own programs and grants. Within each state, some counties may have different types of programs however the availability of funds may be limited either annually or by quarter. Home buyer’s general have to take credit counselling courses. These courses may different per county and Continue reading
Almost everyone has rented a home at some point in their life. Most people have no choice but to have to rent once they have finished school. Commonly debts are high and income is low. Most younger people are focused on just finding a good job and haven’t even thought of putting together a finance plan.
Whatever type a plan you put together, whether it’s a Continue reading
Be Grateful for Those Who Served
I know for most people it’s hard to imagine the feeling that an eighteen-year-old man or women may have, on that first moment that the strong, angry looking man – wearing a large brimmed hat – yells at them to get off the bus and to stand on a set of yellow painted foot prints on the pavement in Paris Island, South Carolina.
Why in the world would someone ever want to put themselves in this position? What has happened in that little space between someone’s ears Continue reading
What Are You Waiting For?
In 2006 – 2007 we saw the highest housing prices and sales on record. Why with today’s housing prices – still on average less than 65% of those homes values – and with today interest rates more than 2% less than during that time frame are most still not buying in today’s market.
Really – What Are You Waiting For?
Has our attitude towards home ownership diminished? Continue reading